The Latin American country has also pledged to automatically exchange tax information with Colombia, Mexico and Peru, in the context of the Pacific Alliance.
Angel Gurria, OECD Secretary-General, described the signing as timely, given the political focus on tax matters and particularly the level of support for automatic information exchange.
“The G20 has declared automatic exchange of information as the new global standard, and have asked the OECD to work on developing it. Chile’s decision to sign this Convention, while implementing automatic exchange of information with partners Colombia, Mexico and Peru, helps move the agenda forward,” said Gurria.
“Increasing international cooperation will reinforce Chile’s ability to fight tax avoidance and evasion. Chile has much to gain by cooperating with the growing number of countries signing the Convention. The only losers will be tax evaders who find they have fewer and fewer places to hide,” said Gurria.
The convention must now be ratified by the Chilean Congress.
The signing comes as no surprise to Marcelo Munoz Perdiguero, of Salcedo y Cia, who said that Chile’s decision to become a part of the convention is in line with the country’s openness to the world and to a free and fair trade between nations, especially with the ever-increasing demand for transparency in cross-border operations.
“That can be seen in the numerous tax treaties in force with other countries, where the exchange of information constitutes an important issue,” said Munoz Perdiguero. “The recent enforcement of the domestic transfer pricing rules requires such international and country-to-country exchange of information on such a sensitive but important issue as the taxation of international transactions, the location of assets and the source and destiny of resources. Article 41E of the Income Tax Law, which governs transfer pricing, expressly allows the fiscal authority to share information with key countries such as Argentina and Peru. This step will facilitate and speed up the process with other jurisdictions.”
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